But are businesses and landlords keeping up with demand for real estate outside city walls?
The unstoppable rise of flexible working has many positives: a better work/life balance; fewer hours wasted commuting to far-flung offices; and the opportunity for business growth without being tied into expensive leases.
But is supply keeping up with demand?
Traditionally, young people and graduates were lured by the bright lights of the big city and it was a natural path to pack your case and your recent qualification to seek new opportunities in the urban jungle.
But the increasingly high cost of living, pollution and crowded city centres are sending a new generation of workers and entrepreneurs back to the suburbs, towns and villages they grew up in.
With rents swallowing incomes and the prospect of buying a home simply unattainable for many, the attraction of big-city life is no longer what it once was. Recent data show a steady flow of young people leaving London, with the number is increasing year on year.
Once known for being uninspiring and middle-aged, the suburbs are enjoying a renaissance as never before as millennials – the largest demographic in the global workforce – move in to take advantage of the affordable rents and a better quality of life.
The move has been termed the Millennial Exodus – and it shows no signs of slowing down.
The model of the traditional head office, where everyone turns up at 9am and leaves at 5pm, is becoming a thing of the past. Cloud computing and sophisticated software allow millennials to be choosier about how, where and when they work; savvy employers know that, if they want to attract top talent, they need to offer workplace flexibility. As a result, flexspace is being offered by more and more businesses to cater to a workforce that has come to expect flexible working as part of the normal employment contract.
Many corporate employers have already begun to recognise this new way of working, and are turning to what’s been termed the “hub-and-spoke” model: a main office complemented by flexspace in suburban locations closer to employees’ homes.
It’s not only large-scale businesses using flexspace like this, however. The rise in self-employment and the gig economy means that sole traders and entrepreneurs comprise a large part of this demand too, and it’s this combination that’s contributing to the rise of flexspace outside of major cities – and spilling over into towns and suburbs.
The question for landlords and property developers is this: are they ready for these changes, and are they keeping up with the demand by identifying previously unthought-of locations as potential flexspace destinations? Are companies making sure their flexspace offering is up to scratch and attracting the best talent?
For property developers, it’s worth considering how flexspace might be utilised and included in buildings outside of city centres – and perhaps reconsidering the types of buildings that can be used to widen the scope. After all, the demand is growing year on year, and the market offers a lucrative and low-risk return on investment when it’s done right. (Source IWG)
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